Bakhriddinov Vikorjon
Tashkent State University of Economics,
PhD student at Department of macroeconomic
analysis and forecasting, Tashkent, Uzbekistan.
E-mail: v.bakhriddinov@tsue.uz, https://orcid.org/: 0000-0002-9169-5316
Abstract. The systematic negative impact of inflation on many macroeconomic indicators, in particular, the standard of living and income, the purchasing power of the national currency, and expectations, requires adopting peculiar anti-inflationary measures. However, as long as the nature of inflation and its determinants, which cause it to form, are not studied sufficiently, defining the main directions of the anti-inflation policy will remain uneffective. Therefore, the need for an empirical assessment of the factors of inflation is required in order to figure out the directions and tools of macroeconomic policy against inflation. The main goal of this article is to empirically analyze the drivers of inflation in Uzbekistan. In particular, the analysis covers monthly data from 2016 to 2022 by considering 76 observations. This study exploited the SEM model based on the standard equation of the multiple regression model. Furthermore, the model seeks to quantify the effects of seven independent variables on inflation, including the exchange rate, reserve requirement, expectations, investment, consumer goods, seasonality, and holidays. The normal distribution of the variables was tested by the Shapiro-Wilk and Shapiro-Francia tests, while their stationarity was checked by the Dickey-Fuller and Phillips-Perron unit root tests. According to the results, the determination coefficient of the model was 0.71. As we suspected, the variables with the highest correlation among the factors were seasonality (0.517) and holidays (0.443). At the same time, the regression coefficient of the exchange rate demonstrated a value of 0.11 while the inflation expectations reflected a value of 0.29. Also, the regression coefficient of the reserve rate indicated 0.033, showing the negative correlation with inflation. Moreover, we developed relevant conclusions and recommendations based on the results of the model.
Key words: consumer price index, inflation targeting, SEM model, exchange rate, expectations, investments, reserve requirement, seasonality effect.